Cubitz.com, Short on Cash, Sheds Employee Weight, Studies Options

SEATTLE, WA-Cubitz.com, a month away from the launch of its commercial real estate website, on Friday told 17 of its 40 employees they will be laid off at the end of this week.

The Seattle-based company has been struggling to find additional financing since April when it announced a $2 million round of financing led by Loeb Partners and Insignia Financial Group, both based in New York. Elie Feingold, who founded the company in 1998, tells GlobeSt.com that the company got tripped up by August, a notoriously terrible time to find money.

To boot, says Feingold, “we recently learned that our ability to raise bridge capital (from existing investors) was diminished, and that it is going to take quite a while to raise additional capital. In light of that, we had to make the hard decision of letting a significant number of people go.”

Still, says Feingold, the company is looking forward, and still has a lot of things going for it. The company’s current operating cash is coming from previous bridge-round support from current investment partners, according to Feingold, who would not elaborate.

“Fortunately, we have a lot of significant relationships that we’ve already built and are very far down the line with,” he tells GlobeSt.com. “So we have pretty full confidence that we will soon be able to talk about more positive news.”

If that means the company is a good acquisition target, no one is saying. When asked if the company was considering that route, Feingold chose not to comment.

In the meantime, Feingold is making sure he provides his employees with as much support finding new work as they have given the company in creating “a new way to lease business space.” that Feingold says will be complimentary to existing sites listing space for lease or sale.

Indeed, says Feingold, after giving notice to employees on Friday, and telling them they could use this week to search for new jobs before being officially laid off, all 40 employees showed up for work on Monday. Many also volunteered to stay on and work for free, he says.

“Despite what is honestly a painful and difficult time, we also see that there’s a lot of good stuff out ahead of us,” Feingold says. “That, fortunately, is keeping us busy.”

For the record, the earliest inkling that something less than positive happened at Cubitz on Friday was provided by a unique, rumor-based website focused on struggling dot-com companies. The site, the URL for which is a profane play on Fast Company (fill in the blanks to find it: www.f—edcompany.com), added Cubitz on its website this morning, though some of the information was erroneous.